The Basics of Brand Architecture
These days, it is rare to find companies with only one brand. Companies are aiming for more profit. More brands mean more revenue, therefore more profit. Often the result of mergers or takeovers made companies end up with a set of brands, products, services that can only be called as disorganized. This is where brand architecture came in.
So what is brand architecture?
In short, brand architecture provides clarity amid chaos.
Brand architecture is a way of organizing the sub-brands of a parent brand. Brand architecture defines both the extent and depth of your brand. It shows how each brand relates to each other. A brand architecture enables people to see a clear organizational structure of a company’s portfolio of brands.
Okay, then why is it so important?
A strong and clear brand architecture will allow your business to:
- Help new brands perform better
A newly developed or acquired brand will perform better if the parent brand has a strong brand architecture. People can easily associate the new brand with the parent brand, so you have now developed a brand that the consumers trust. - Influence consumers behavior
Let’s look on an example, say consumers have previously purchased your brand's product or service and had a positive experience, then they are more likely to try another product from your brand or sub-brands. - Effective marketing
Once all of your brands are organized in a strong and clear architecture, then you have the opportunity for cross-promotion between brands. This will reduce your marketing costs significantly.
Next, let’s look into brand architecture types.There are various types when it comes to brand architecture, but the most notable ones are monolithic or branded house, hybrid or house of brands, and endorsed architecture. Each type has its strengths and weaknesses. Let’s look into them one by one so you can choose which type is best for your business.
Monolithic or Branded House
What is monolithic or branded house architecture?
In the branded house architecture, the parent brand has very strong branding. The sub-brands are dependent on the strength of the parent brand as they do not have their own identities.
The parent brand has a logo and the sub-brands will have the logo along with the descriptive name for each product or service. One of the most famous brands using monolithic brand architecture is FedEx, a multinational delivery services company.
Example of a monolithic or branded house architecture
[Source: https://bit.ly/2CPue5Y]
Is this suitable for your company?
If you are sure you have one brand that can hit homerun in all categories, such as markets, target audience, geographical and even language barriers, then monolithic or branded house architecture is suitable for your company.
What are the pros and cons of this type?
Pros:
- Highly recognizable
Consumers have the tendency to buy products or services that feels familiar to them. Using monolithic or branded house architecture will make your brand easily recognized by consumers. - Efficient
One marketing strategy can be implemented to all brands and therefore less cost. - Clarity
Consumers will not be confused about whether a certain sub-brand is under your brand or not, the branded house architecture makes it crystal clear that those sub-brands are all within your company.
Cons:
- All for one, one for all
A problem with one sub-brand can end up being a problem for the entire brand related to that one sub-brand. Also, if the parent brand is underperforming, then it is unlikely that the rest of the brands are performing well. - Ambiguous
A brand can and most likely have to products and/or services in many different categories that might be not related to one another. Consumers might be confused about what your brand does; Is it a frozen food company? Is it a houseware company? Is it a clothing brand?
Hybrid or House of Brands Architecture
What is hybrid or house of brands architecture?
It is the total opposite of monolithic or branded house approach. All brands are independent and act as stand-alone brands. Each brand has its separate identities, personalities, audiences, and sometimes they even compete with each other. So it is understandable that consumers are not aware that some particular brands are actually under the same parent brand.
Example of a hybrid or house of brands architecture
[Source: https://bit.ly/2WD4twz]
[Source: https://bit.ly/3hkWufD]
Is this suitable for your company?
This type works well for large consumer companies, notably fast-moving consumer goods (FMCG) companies. This is also for you if you have diverse brands and want to maximize each brand’s impact on a market, target audience, and brand positioning.
What are the pros and cons of this type?
Pros:
- Maximum Reach
Since each brand is different from the other, it will allow the brand as a whole to reach a greater audience and broaden the brand’s demographic reach. - Self-sufficient
Every brand acts as a stand-alone brand, therefore in case there is a bad reputation for other sub-brand (One that is actually under the same parent brand), the brand will not be affected. Also, each brand has the liberty to generate its own identity, branding, brand strategy, personality, and campaigns.
Cons:
- High marketing costs
As one brand is distinctively different than the other, the marketing costs are far from efficient. Marketing strategies and campaigns from every brand are very likely to be nothing alike. Hence the marketing costs will skyrocket. - A single fighter
The success of a sub-brand will not be directly attributed to the parent brand as there isn’t much power behind the parent brand itself. So the reputation of the parent brand cannot be relied on to boost the reputation of individual brands.
Endorsed Architecture
What is endorsed brand architecture?
Now that you have learned two brand architecture from both sides of the spectrum, the last one is somehow a combination of both. Endorsed brand architecture is in between a branded house and house of brands. In endorsed brand architecture, the parent brand plays a larger role than it does in a hybrid or house of brands architecture. Each brand has its own identities however, there is a clear connection between the brand and the parent brand.
Example of an endorsed architecture
[Source: https://bit.ly/2WHpaYr]
Is this suitable for your company?Endorsed brand architecture increases the flexibility of your brand as it allows the sub-brands to carry different names but still acknowledged that the sub-brands are under the parent brand. It also allows for more positioning alternatives than a house of brands approach.A tip, if the sub-brand category is more farfetched than the parent brand, then you should choose the endorsed brand architecture. What are the pros and cons of this type?
Pros:
- Assurance of quality
If the parent brand has an excellent reputation, then the endorsed brand (sub-brands) gain an advantage as it increases consumer’s confidence to purchase product or services from the endorsed brand. - A win-win marketing strategy
The marketing strategy can be applied to both the parent and sub-brands. Furthermore, it also enables cross-selling between sub-brands or sub-brand and parent brand.
Cons:
- Blurred lines
The target audience may not distinguish the sub-brand separation from the parent brand. - Domino effect possibility
As consumers can recognize the sub-brand is a part of the parent brand or connected to another sub-brands, a negative reputation from another sub-brand or parent brand might potentially impact the innocent sub-brand.
